Exhibit 10.16


 


FORM OF SERIES
C AND D RESTRICTED STOCK UNIT AWARD

AGREEMENT


 


This Agreement (the “Agreement”), dated and effective as of
             
(the “Effective Date”), among Blue Ridge Paper Products Inc., a Delaware
corporation (the “Company”), Blue Ridge Holding Corp., a Delaware corporation
(the “Parent”), and
             (“
Employee”).


 


WHEREAS, the Parent desires to grant to Employee restricted stock units
(the “Restricted Stock Units”)in respect of
         shares of common stock of
Parent, par value $0.01 per share (the “Common Stock”), upon the achievement of
certain service criteria, on the terms and conditions, and subject to the
restrictions, set forth herein; and


 


WHEREAS, the award made in this Agreement has been approved prior to
its execution by the holders of 100% of the voting power of all outstanding
stock of the Company and by the holders of more than 75% of the voting power of
all outstanding stock of the Parent.


 


NOW, THEREFORE, in connection with the mutual covenants hereinafter set
forth and for other good and valuable consideration, the parties hereto agree
as follows:


 


1.                                       Grant
of Restricted Stock Units.  The
Parent hereby grants to Employee Restricted Stock Units in respect of
       shares of Common Stock subject to
satisfaction of the Service Condition (as defined in Section 4(a)).


 


2.                                       Definitions.  For purposes of this Agreement:


 


(a)                                  “Restricted
Period” with respect to a Restricted Stock Unit shall mean the period prior to
the satisfaction of the Service Condition with respect to such Restricted Stock
Unit.


 


(b)                                 “Restricted
Stock” shall mean any shares of stock delivered to Employee pursuant to
Section 6 upon settlement of any Restricted Stock Unit.


 


(c)                                  “Fair
Market Value” shall be a value determined in good faith by the Board of
Directors of the Company (the “Board”).


 


(d)                                 “Federal
Short-Term Interest Rate” shall mean, on a given date, the applicable Federal
short-term rate (for quarterly compounding)in effect under
Section 1274(d)of the Internal Revenue Code, as published from time to
time by the Internal Revenue Service.


 


(e)                                  “Disability”
shall mean Employee’s incapacity due to physical or mental illness which
results in Employee’s inability to perform his duties to the Company for 200 or
more days in any 240-consecutive day period.


 


3.                                       Non-Transferability.


 


(a)                                  Employee
may not sell, transfer, pledge, or otherwise encumber or dispose of any
Restricted Stock Unit and the Restricted Stock Units shall not be transferable,


 

















 


whether
voluntarily, by operation of law or otherwise, including, but not by way of
limitation, by execution, levy, garnishment, attachment, pledge, bankruptcy or
in any other manner, and no such Restricted Stock Units shall be subject to any
obligation or liability of Employee other than to the Parent or the Company
pursuant to this Agreement.


 


(b)                                 Restricted
Stock shall not be transferred except in accordance with this Agreement and the
Stockholders’ Agreement, dated as of May 14, 1999, between the Parent and the
Stockholders listed therein, as amended, modified and supplemented from time to
time (the “Stockholders’ Agreement”), including Section 3.2(b)thereof, as
if Employee was a “Shareholder” as defined therein.


 


4.                                       Service
Condition and Lapse of Restricted Period.


 


(a)                                  The
Restricted Period shall lapse with respect to one hundred percent (100%) of the
Restricted Stock Units on the first anniversary of the Effective Date, provided
that Employee remains continuously employed by the Company during the period
commencing on the Effective Date and ending on such anniversary (the “Service
Condition”).


 


(b)                                 In
the event Employee’s employment with the Company is terminated for any reason,
any Restricted Stock Unit remaining subject to the Restricted Period at the
time of such termination shall be immediately forfeited.


 


5.                                       No
Rights as a Shareholder.  Employee
shall have no rights of a stockholder, including, without limitation, voting
rights, with respect to any Restricted Stock Units granted hereunder.


 


6.                                       Delivery
of Shares.


 


(a)                                  Stock
certificates evidencing the number of shares of Restricted Stock in respect of
Restricted Stock Units as to which the Restricted Period has lapsed shall be
delivered to Employee by Parent on the earliest to occur of: (i) the
termination of Employee’s employment with the Company for any reason; (ii) the
date which is eighteen months after an initial public offering of the Common
Stock; (iii) the date on which any right or obligation to sell shares of
Restricted Stock becomes effective hereunder or under the Stockholders’ Agreement
as if Employee was a “Shareholder” as defined therein; and (iv) at the election
of Employee, June 30, 2006.


 


(b)                                 Notwithstanding
any provision of this Agreement to the contrary, any stock certificate
delivered to Employee hereunder, or to any other person or party at the
direction of Employee, shall be subject to all of the agreements, terms,
limitations and conditions set forth in the Stockholders’ Agreement as if
Employee was a “Shareholder” as defined therein.  Any such certificates so delivered to Employee hereunder shall
bear the following legend reflecting the applicability of the Stockholders’
Agreement to the shares represented by such certificate.


 


THIS CERTIFICATE IS SUBJECT TO, AND IS TRANSFERABLE ONLY UPON
COMPLIANCE WITH, THE PROVISIONS OF THE RESTRICTED STOCK UNIT AWARD


 


2

















 


AGREEMENT AND THE STOCKHOLDERS AGREEMENT AMONG THE COMPANY AND ITS
STOCKHOLDERS.  A COPY OF THE ABOVE
REFERENCED AGREEMENTS ARE ON FILE AT THE PRINCIPAL OFFICES OF THE COMPANY.


 


In addition, stock certificates evidencing Restricted Stock that are
delivered hereunder shall bear restrictive legends in substantially the
following form and such other restrictive legends as are required or advisable
under the provisions of any applicable laws or are provided for in any other
agreement to which Employee is a party:


 


THE SHARES REPRESENTED BY THIS STOCK CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND SHALL NOT BE
TRANSFERRED EXCEPT PURSUANT TO (I) AN EFFECTIVE REGISTRATION STATEMENT, OR (II)
AN EXEMPTION FROM REGISTRATION UNDER SAID ACT.


 


7.                                       Rights
on Termination of Employment and Otherwise.


 


(a)                                  Following
any Termination.  At any time or
from time to time following the date which is six months following (i) the
termination of Employee’s employment with the Company for any reason or (ii)
the delivery of any stock certificates to Employee pursuant to
Section 6(a)(iv), if applicable, the Parent shall have the right (but not
the obligation) to purchase all or any portion of Employee’s Restricted Stock
from Employee for an amount equal to the number of shares of such Restricted
Stock multiplied by the Fair Market Value of each such share of Restricted
Stock with respect to the date of exercise of such right.


 


(b)                                 Death
and Disability.  Upon a termination
of Employee’s employment with the Company as a result of the death or
Disability of Employee, Employee (or, if applicable, his estate or the person
then acting on Employee’s behalf) shall have a right to cause Parent to
purchase (a “Put Right”) Employee’s Restricted Stock not purchased by the
Parent pursuant to Section 7(a) for an amount equal to the number of
shares of such Restricted Stock multiplied by the Fair Market Value of each
such share with respect to the date of exercise of such Put Right.  Employee’s Put Right may be exercised at any
time or from time to time during the 90-day period commencing on the date which
is six months following the date on which stock certificates representing such
shares of Restricted Stock are delivered to Employee pursuant to
Section 6.


 


(c)                                  Additional
Rights.


 


(i)                                     Subject
to the Parent’s financing agreements, if Employee (or, if applicable, his
estate or a person then acting on Employee’s behalf) exercises any Put Right
described in Section 7(b) above, the Parent or the Company shall pay to
him within one year following the date of the exercise of such Put Right the
purchase price of the Restricted Stock being purchased by the Parent pursuant
to such Put Right with interest from the date of exercise of such Put Right at
the Federal Short-Term Interest Rate in effect on the first day of the month of
such exercise, to be recalculated on the first day of each month thereafter
until all


 


3

















 


payments are
made.  If the Parent or the Company is
unable to pay Employee for the Restricted Stock in accordance with the
preceding sentence as a result of any covenant in any of its financing
agreements, the Parent shall pay Employee for such Restricted Stock as soon as
possible under such financing agreements, with interest at the Federal
Short-Term Interest Rate in effect on the first day of the month of termination
to be recalculated on the first day of each month thereafter until all payments
are made.


 


(ii)                                  Employee
will have a Put Right during the ninety (90) day period following
December 31, 2006 with respect to any shares of Restricted Stock in
respect of Restricted Stock Units, stock certificates for which he has then
held for a period of not less than six months. 
The purchase price of such Restricted Stock will be the Fair Market
Value of such Restricted Stock as of the date of exercise of the Put Right and
will be paid, at the election of Parent, either (i) in a lump sum within 90
days of the exercise of such Put Right or (ii) in equal annual installments by
Parent upon each of the first four (4) anniversaries of the date of the
exercise of such Put Right, earning interest at the Federal Short-Term Interest
Rate.


 


(iii)                               Employee
shall have no Put Rights under this Agreement with respect to Restricted Stock
at any time that the Common Stock is (i) publicly traded,
(ii) registered pursuant to the Securities Act and (iii) transferable by
the Employee, subject to normal securities law restrictions applicable to
trading of registered securities by an employee officer of an issuer or
reasonable restrictions imposed on such transfers by an underwriter of such
stock.


 


(iv)                              Any
Put Right under this Agreement with respect to the Restricted Stock will be
necessarily subject to those conditions imposed by the Parent and the Company’s
financing documents or other contract to which the Parent or the Company is a
party or by applicable law.


 


(v)                                 Employee
shall have a Put Right during the period commencing on the date on which stock
certificates representing shares of Restricted Stock are delivered to Employee
pursuant to Section 6 and ending on the date on which Employee is required
to file a tax return in respect of such delivery with respect to a number of
shares of Restricted Stock having an aggregate Fair Market Value (determined in
good faith by the Board) equal to the excess, if any, of the aggregate tax
payment made or to be made by Employee in respect of such delivery of stock
certificates over any amount withheld in respect of such delivered shares
pursuant to Section 13.


 


8.                                       Miscellaneous.


 


(a)                                  Notices.  All notices or other communications required
or permitted hereunder shall be in writing and shall be delivered personally or
by reputable commercial messenger service, telecopied, or sent by certified,
registered or express mail, postage prepaid. 
Any such notice shall be deemed given when so delivered personally or by
such messenger service or so telecopied or, if sent by certified, registered or
express mail, five days after the date of deposit in the United States mail, as
follows:


 


4

















 


(i)                                     if
to the Parent or the Company, at the Company’s then corporate headquarters, to
the attention of the Company’s President;


 


(ii)                                  if
to Employee, at Employee’s then current address as reflected in the personnel
records of the Company.


 


Any party may,
by notice given in accordance with this Section 8(a), designate another
address or person for receipt of notices hereunder.


 


(b)                                 Arbitration.  Notwithstanding any other provision of this
Agreement to the contrary, any disputes hereunder relating to this Agreement
shall be settled exclusively by arbitration conducted in accordance with the
Commercial Arbitration Rules of the American Arbitration Association.  The place of the arbitration shall be
Charlotte, North Carolina.  All costs
and fees associated with any arbitration conducted pursuant to this
Section 8(b) shall be borne equally by the parties thereto, provided that
each party shall be responsible for his or its own attorneys fees.


 


(c)                                  Non-Disclosure.  Employee shall not disclose any of the terms and conditions of
this Agreement except for disclosure (i) required by order of a court or other
body having jurisdiction over such matter or (ii) with the written consent of
the Company.  Upon any violation of this
Section 8(c) by Employee, (x) any Restricted Stock Unit awarded herein
shall be immediately forfeited.


 


9.                                       Binding
Effect.  This Agreement shall be binding
upon the heirs, executors, administrators and successors and assigns of the
parties hereto.


 


10.                                 Governing
Law.  This Agreement shall be
governed by, and construed and interpreted in accordance with, the laws of the
State of North Carolina without reference to principles of conflict of laws.


 


11.                                 Headings.  Headings used herein are for convenience of
reference only, do not constitute a part of this Agreement and shall not be
deemed to limit or affect any of the provisions hereof.


 


12.                                 Severability.  To the extent any portion of this Agreement
or any portion of any provision of this Agreement is held to be invalid, void
or unenforceable by a court of competent jurisdiction, such court shall
substitute a valid, enforceable provision that preserves, to the maximum lawful
extent, the terms and intent of this Agreement.


 


13.                                 Withholding.  Upon the delivery of any stock certificates
evidencing shares of Restricted Stock to the Employee pursuant to
Section 6, Employee may satisfy the amount of any income tax withholding
required by law (and Parent shall timely remit such amount to the relevant
taxing authorities) by either of the following methods, or by a combination of
such methods: (a) tendering a cash payment to the Parent or (b) delivering to
the Company previously acquired shares of Restricted Stock or having the Parent
withhold stock certificates for shares of Restricted Stock otherwise then
deliverable to Employee having an aggregate fair market value (determined in
good faith by the Board) equal to the amount of such


 


5

















 


withholding
obligation.  The satisfaction of such
withholding obligation shall be a condition precedent to the delivery to
Employee of stock certificates in accordance with Section 6.


 


14.                                 Adjustment
to Restricted Stock and/or Restricted Stock Units.  If there shall be any change in the
outstanding shares of Common Stock or Preferred Stock by reason of any stock
split, stock dividend, merger, consolidation, combination or exchange of shares
for other securities, recapitalization, or similar corporate change, then the
number of Restricted Stock Units or shares of Restricted Stock, as the case may
be, referred to herein, shall be automatically and appropriately adjusted to
give effect to such change.


 


15.                                 Third-Party
Beneficiary.  There are no
beneficiaries to this Agreement other than the signatories hereto.


 


16.                                 Inconsistent
Agreement.  To the extent that any
provision of this Agreement is inconsistent with the Stockholders’ Agreement,
the terms of the Stockholders’ Agreement shall govern as if Employee was a
“Shareholder” as defined therein.


 


EXECUTED on the day and year first written
above.


 


	
   

  	
  BLUE RIDGE
  PAPER PRODUCTS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BLUE RIDGE
  HOLDING CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [Name]

  



 


6